An International Approach to the Neutral Interest Rate

Andres Blanco

Policy Hub, 2024, vol. 2024, issue 7, 13

Abstract: Following the COVID-19 recession, the US net international investment position, which is negative, declined to nearly 90 percent of national income. This decline coincided with an increase in long-term yields and a steady drop in net investment income. Increasing net savings is necessary to meet the US long-run budget constraint, suggesting that higher interest rates are needed to boost the net savings of US households and firms.

Keywords: neutral interest rate; current account; net saving rate (search for similar items in EconPapers)
JEL-codes: E24 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:fip:a00068:99105

DOI: 10.29338/ph2024-07

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